KUALA LUMPUR (April 21): Steel Hawk Bhd (KL:HAWK) has initiated legal action against a former project partner and four others over alleged breaches of trust, misappropriation of funds and fraudulent misrepresentations linked to an engineering collaboration involving projects for Tenaga Nasional Bhd (TNB) (KL:TENAGA).
The group is seeking at least RM14.39 million in the lawsuit filed by wholly-owned unit Steel Hawk Engineering Sdn Bhd against Ibrahim & Sons Engineering Sdn Bhd, Always Ahead Engineering Sdn Bhd and three individuals, namely Zafrin Ibrahim, Zulkflee Ibrahim and Khaeromze Ahmad.
In a Bursa Malaysia filing on Tuesday, Steel Hawk said the suit stemmed from a collaboration agreement signed in July 2025, under which Ibrahim & Sons were to act as the main contractor for several engineering projects relating to TNB, while Steel Hawk Engineering would provide working capital and funding in return for repayment and profit-sharing.
The group claimed that Steel Hawk Engineering had between 2025 and 2026 paid RM11.63 million to Ibrahim & Sons and Always Ahead Engineering, based on representations made by the defendants.
"It was an express term of the collaboration agreement that all payments received from TNB were to be treated as trust monies and deposited into designated trust account(s) and/ or escrow account(s)," it said.
However, Steel Hawk alleged the defendants failed to ensure payments from TNB were remitted into the designated accounts, leading to TNB allegedly making payments into unauthorised accounts, including a sum of RM2.76 million.
The group further claimed that certain TNB purchase orders and a purported letter of award relied upon by the defendants were false, non-existent and/or had been cancelled.
Among the reliefs sought are declarations that the agreement was unlawfully terminated, that monies received from TNB in relation to the collaboration agreement are held on trust for Steel Hawk Engineering, and that the company is entitled to approach TNB for a novation or assignment of the collaboration agreement.
Steel Hawk Engineering is also seeking RM11.63 million allegedly paid under the arrangement, RM2.76 million said to have been diverted or misappropriated, as well as general, exemplary and aggravated damages.
Steel Hawk said it does not expect the commencement of the suit to have any immediate material financial or operational impact on the group pending the outcome of the litigation.
Shares of Steel Hawk, which transferred its listing from the LEAP Market to the ACE Market of Bursa Malaysia in September 2024, slipped 0.5 sen or 2.13% to close at 23 sen on Tuesday, giving the group a market capitalisation of RM112.8 million.